After taking charge once again as Chief Minister of West Bengal, Mamata Banerjee is not wasting any time. She has shot off a letter to Prime Minister Narendra Modi reminding him of unpaid amounts under financial assistance schemes to eligible farmers in the state.

Banerjee referred to her letter dated December 31, 2020, addressed to the Union Minister of Agriculture and Farmers Welfare in which she had asked for benefits provided under the PM-KISAN scheme to farmers in West Bengal. “Several communications were also made from the State Government, Department of Agriculture. However, no concrete response has yet been received from the Ministry on this,” she wrote.

Banerjee went on to list all steps taken by the state government to appoint necessary officials, open bank accounts, monitor registration of farmers for the scheme. She also mentioned efforts made under the state government’s Krishak Bandhu scheme which she said was better than the PM-KISAN scheme as it covered all farmers, while the Central scheme excluded share-croppers, self-declared farmers and others.

She also reminded him of his promises to release arrears that Modi made during election campaign rallies. Banerjee said, “I would further impress that during your recent visit to the state, you gave repeated assurances on releasing the arrear amount of Rs 18,000 to each farmer, but till date no fund has been received by the State of West Bengal or the farmers.”

Banerjee ended by asking Modi to direct the concerned Ministry to release funds due. The entire letter may be read here: 

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The Ministry of Social Justice and Empowerment said during the Parliament’s monsoon session that Rs. 11.80 crores are available as unutilised funds for providing rehabilitation to manual scavengers in the year 2020-21. However, it categorically says that these funds are exclusively for people identified as manual scavengers, and not all sanitation workers in general.

This was in response to questions raised by Member of Parliament Natrajan P. R. who asked the Ministry of Social Justice and Empowerment about the unutilised fund held under the Self Employment Scheme for the Rehabilitation of Manual Scavengers (SRMS.) He also asked about the budget provision for the prohibition and rehabilitation of manual scavengers in the last three years.

To this the Minister of State for Social Justice and Empowerment Ramdas Athawale said, “The implementing agency of the Scheme, National Safai Karmacharis Finance and Development Corporation (NSKFDC) is having Rs. 11.80 crores as unutilised funds as on September 15 for providing rehabilitation benefits to the remaining identified manual scavengers and their dependents during the period of the current fiscal year.”

Regarding budget allocation of funds, he said Rs. 110 crores were allocated from the Budget under the Self Employment Scheme for the Rehabilitation of Manual Scavengers (SRMS) for 2020-21, although as of September 15, no funds have been released. In 2019-20 the same amount was allocated out of which Rs. 84.80 crores were released by the government. This was less than the funds released in 2018-19 when the full revised allocation of Rs. 85.76 crores was released.

When asked about the sanitation workers who had benefited under the scheme, Athawale said that workers who are not identified as manual scavengers are not eligible for the SRMS. However, according to government data, nearly 14,000 manual scavengers received one-time cash assistance in 2020-21. As of September 15, as many as 30 people received the capital subsidy for self-employment projects. This is a sharp drop from figures of previous years, and one wonders if this can, or should be attributed to Covid-19, given how sanitation workers have been on the frontlines, and should be seen as Corona Warriors, much like doctors, nurses or policemen.

In 2019-20, a little more than 13,000 people received one-time cash assistance, as many as 2,532 people received skill development training and 114 people received the capital subsidy for self-employment projects. Similarly, in 2018-19, one-time cash assistance was given to 18,079 people while 1,682 people received skill development training and as many as 151 people received money for self-employment projects.

AU1451 

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The Odisha government last week announced a Rs. 100 crore Urban Wage Employment Initiative to generate employment for the urban poor in 114 urban local bodies (ULBs), reported The Indian Express.

The initiative announced by Chief Minister Naveen Patnaik’s office, is aimed at benefitting around 4.5 lakh families and will run from April until September.

The scheme is said to involve “labour-intensive work such as maintenance and upgradation of toilets and water infrastructure” in ULBs while also ensuring that social distancing is maintained, a senior bureaucrat said. He added that the initiative would try to also support local artisans through projects like wall paintings and murals in urban areas. Mask-wearing would also be compulsory. All sites will have hand sanitizers as well.

The Telegraph reported a senior official also said, “If a particular zone is declared a containment zone following the detection of new coronavirus-positive cases, labour-intensive projects will be undertaken in other areas of the city.” The projects are said to involve work like cleaning drains, reclaiming water bodies, remodeling playgrounds, beautifying parks, building toilets and planting trees.

Law Minister Pratap Jena told reporters: “Rural areas have employment and development projects, such as MGNREGS, but urban areas do not. This project will try to address this gap”. He also said that the scheme will be carried out in association with the Mission Shakti Department (a department which assists women’s self-help groups). He said, “Nearly 4.5 lakh urban families will benefit from this scheme. The money will come solely from the state exchequer. Women’s self-help groups will be drafted into the scheme. Each beneficiary’s wages will be credited to his or her bank account every week.”

A government notification read that labourers above 60 and those showing symptoms such as sneezing or cough, would not be engaged in the initiative. It added, “If workers are required from outside, special transport facilities will be arranged by the contractors, construction agency without dependency on public transport.”

G. Mathivathanan, principal secretary, housing and urban development, told The Telegraph: “The programme will be implemented from April 20. Although the lockdown is still May 3, several restrictions will be relaxed from April 20.”

Apart from this, the Chief Minister’s private secretary, VK Pandian, is meeting with all the labourers to learn about their problems and assure them that the government would help them.

In light of this initiative, the government has also banned spitting and all tobacco products at such project sites.

The Uttar Pradesh government too has planned a similar initiative, The Times of India has reported. To help migrants tide over the crisis, the government has plans to employ them under the MNREGS outside containment zones and only with proper social distancing norms. Principal Secretary, rural development, Manoj Singh said, “Youth seeking jobs under MNREGS will immediately be given job cards. If a youth’s name does not figure in the job card of a family, then it will be added.”

In Bihar too, migrants who have returned due to the lockdown, will be provided employment by the government after being engaged in fox nut production, bee farming, banana cultivation, goat rearing and mushroom cultivation under the BIOTECH KISAN scheme.

Bihar’s Agriculture and Animal and Fishery resources Minister Prem Kumar said that under the Bihar Agricultural University in Bhagalpur, students have started taking online courses and the varsity had also helped in preparation of 5,028 quintal paddy seeds, reported Daiji World.

He said, “”Youths who are experienced in bee farming, banana cultivation, goat rearing and mushroom cultivation, etc and have returned from other states to Araria, Aurangabad, Banka, Khagaria, Purnia and Katihar will be encouraged to earn their livelihood under the Biotech-KISAN scheme.”

He said that farmers of Patna, Lakhisarai and Gaya districts have been educated about Khesari crop production under the Biotech Farmers Hub Scheme. “Post lockdown, skill development training will be started in a big way,” the Minister said.

Kumar also added that 4,200 masks were distributed to all 21 Krishi Vigyan Kendras in the state to protect farmers from coronavirus.

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Constant changes in definition and revision of the GDP estimation methodology create suspicion on the quality of data, says Abhijit Banerjee, development economist and professor of economics at the Massachusetts Institute of Technology. India must establish a process which is without interference and increases credibility, he says.

The scheme promises to provide Rs 72,000 annually or “a flat, uniform amount of Rs 6,000 a month to the poorest 50 million Indian families”, and “entails a peak cost of Rs 3.6 lakh crore–1.8% of India’s gross domestic product (GDP) today,” wrote Praveen Chakravarty, chairperson of the Congress party’s data analytics department, in The Economic Times.

Abhijit Banerjee, Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology, was one of the economists consulted for formulating NYAY. “Financial viability is an issue,” he told IndiaSpend in an interview, and suggested that many current schemes would have to be reviewed and shut down.

Banerjee, 58, co-founded the Abdul Latif Jameel Poverty Action Lab or J-PAL, a research organisation, and is one of its directors. He has been a fellow of the American Academy of Arts and Sciences and the Econometric Society, and has been a Guggenheim Fellow and an Alfred P. Sloan Fellow. He received the 2009 Infosys Prize for social sciences and economics, and was named one of Foreign Policy magazine’s top 100 global thinkers in 2011. He co-authored Poor Economics with Esther Duflo, which won the Goldman Sachs Business Book of the Year award. He served on the UN Secretary-General’s high-level panel of eminent persons on the Post-2015 Development Agenda.

In an interview with IndiaSpend, Banerjee spoke about the the financial viability of NYAY, the need for India to formulate a wealth tax, and the quality of government data and interference in its estimation.

In January 2019, GDP for 2016-17, the year that saw demonetisation (in November 2016), was revised upwards to 8.2%. What is your assessment of the economy under the present government, and how does it compare to the previous one?

These numbers have lost so much credibility. I have no way of checking them and am not going to get into a debate about reading the tea leaves. This is the tragedy of constantly revising data.

There are changes in definition and revisions, but it somehow always seems that the growth in a particular year went up. This process needs to stop. No number is perfect, but constantly tweaking the process where there is a potential for political interference does damage. It creates suspicion about the quality of data.

You were one of the 108 signatories to a letter that red-flagged data suppression and interference in data estimation by the current government. Have you witnessed government interference of this nature before, and what must be done to resolve the matter?

There must be a committee of experts that has credibility to propose a stable methodology that can then be back-cast, say for a decade, to reconstruct consistent GDP series for those years.

Even in China there are are similar claims about data manipulation, especially at the provincial level, and there are many people there who are suspicious of the data. I believe that some Chinese government officials have even suggested that they look at non-government numbers. They seem be more open to this than we are.

In India, there have long been discussions on why the GDP data is collected in a particular way or why the government does not invest more in the National Sample Survey. It may be more true now that people are questioning political motives than before, but the idea that the data collection agencies have failed is not new. Earlier, the release of [revised] data was not so frequent and if there was clear opposition to the government’s numbers, the government had a set of experts who were established as being objective. So, it was a bit more process-driven.

Currently, the NITI Aayog comes up with one number after the other whenever it wants. When I speak to people in the financial world, they say that they don’t pay any attention to government data anymore. We must invest money and effort to bring in experts from India and abroad and establish a process which is without interference and stick to it without any fiddling for, say, the next decade.  

Recently, with reference to unemployment, you wrote “something will need to be done, and it will probably eventually take the shape of a minimum income guarantee”. The Congress has proposed NYAY and the Bharatiya Janata Party government has started implementing PM-KISAN (announced in budget 2019) to offer income support to small and marginal farmers. There have been questions about the financial viability of both, particularly NYAY. Your comments?

Financial viability is an issue. There is a long-term problem we face. I think we are not taxing the economy enough. If NYAY is implemented it will add urgency, but even without it we need a series of fiscal intervention. I have been saying this long before NYAY was discussed. I think we are under-taxed.

We need to bring down our interest rates and give some semblance of balance to our budgets. This will involve figuring out the subsidies that need to be cut and taxes to be increased, or risk going back to high inflation. We cannot afford the interest rates we have, our share of government debt in GDP has been going up since 2014, and creditworthiness will eventually be hurt. We do not want to get into such problems. So whether or not we have NYAY we will have to solve the problem [of not imposing enough tax].

Praveen Chakravarty, chairperson of the Congress party’s data analytics department, mentioned in an interview that around 939 schemes excluding 11 core schemes will have to be reviewed for financial rationalisation if NYAY were implemented. Manmohan Singh, former prime minister and economist, said that no new taxes on the middle class would be required to fund NYAY, and that 1.2% to 1.5% of GDP, at the scheme’s peak, would be needed. Do you agree?

I do not think there is going to be enough money from just cutting the minor schemes. But I do agree that schemes should be reviewed and many should be shut down. There is money there which can be utilised. Both taxes and expenditure rationalisation are important. I am all for more taxes on the rich, maybe we can look at some version of a wealth tax. There needs to be some thought on how much the wealthy population can be taxed.

Have you made an assessment of the schemes that can be shut down to facilitate NYAY?

The right way to think about NYAY is that it is the opening step in creating an infrastructure for making money transfers possible rather than an entitlement for a particular good. It is better to give people cash than a fertiliser subsidy or free power.

However the first step has to be to convince people that the subsidy delivery mechanism works. This is what NYAY can do. So the major subsidy schemes cannot be removed before NYAY is well established and in the short-run, there will definitely be some fiscal pressure.

You were consulted by the Congress for NYAY. What sort of inputs did you provide? How will a government go about targeting the poorest given that poverty data has not been collected since 2011-12?

I think the hardest group to target would be those who are a bit further up beyond the bottom 20%. The poorest 20% are relatively easy to identify and if they [the government] are willing to be inclusive, even if it includes up to 22-25%, the targeting should be not too bad.

In our research, we find that there is relative agreement on who the poorest are even within villages. So it should be possible to combine an updated version of the socio-economic and caste census and some local community review mechanisms to come up with a targeting procedure. It may not be perfect, but the scheme has to be run in a way to ensure that the associated infrastructure works and people do not get excluded for random reasons.

I was consulted on matters relating to estimating beneficiaries for the scheme considering that exact numbers or data are not available.

Economic inequality is high in India. The nine richest Indians now own wealth equivalent to the bottom 50%. Nearly 50% of the population is dependent on agriculture that contributes 14% of the GDP. Rural distress is a major issue. What are the solutions? Is moving people out of agriculture the only viable alternative?

We do not have the urban infrastructure to move everybody out of agriculture. It may be true that around 50% are dependent on agriculture, but the share of their incomes from agriculture is actually less than 50%. Many people in agriculture have other jobs to supplement their incomes, which often involve temporary migration to cities.

One of the things governments can do is to create low-cost spaces for migrants to live in so that it is more viable to work in urban areas. But this is unlikely to be a very big part of the story in the short run. My prediction is that we will move towards cash transfer as many of these lives are only marginally viable, especially among the younger, more educated generation that does not want to do the same jobs or have the same lifestyles as their parents did. We have this political problem that needs to be solved.

In a March 2019 paper, you (along with Thomas Piketty and Amory Gethin) noted that “voters seem to be less driven by straightforward economic interests than by sectarian interests and cultural priorities”. Worldwide, we have seen a rise in populist leaders. Is this trend a major worry for India given that the rise of religious divisions and the persistence of strong caste-based cleavages is “determining voters’ choices” while “education, income and occupation play little role (controlling for caste)”?

There should be more politics based on economic interests because those are aspects that we can deliver on without creating social divisions. If voters come to believe that the state cannot offer anything useful in terms of economic benefits, then they will be responsive to sectarian claims. If people start caring about only sectarian issues, then parties have an incentive to promote it and then we will end up in a totally fractured polity.
The advantage of economic interests is that they can often be addressed, whereas sectarian interests cannot be addressed other than saying that we will hurt those others, which is frightening.

The criteria for 10% reservation for economically weaker sections announced by the BJP government allows a majority of households to qualify. How do you assess this reservation policy and what are the political and economic implications that you foresee?

This policy won’t do anything. People from upper castes with an annual income less than Rs 8 lakh are a huge part of the population and they are already getting more than 10% of the jobs. Other than as a political gesture, it will have no consequences.

Almost four-fifth (Rs 5.5 lakh crore, or $79.51 billion) of the total amount of corporate bad loans written off in the last 10 years was during the five years after April 2014, noted an April 2019 report in The Indian Express. Nearly Rs 1.5 lakh crore was during the nine months ending December 2018. Farm loan waivers have received much criticism as a populist measure while such corporate write-offs do not seem to. How do you explain the problem of non-performing assets and write-offs and its implications on the economy?

The public sees it asymmetrically because one happens quietly while the other does not. The media must put the spotlight on such write-offs for corporates. Of course there may not be much of an option now given that the banking system has frozen up under the burden of debt and is unable to deliver.

The issue is more that the wrongdoers get away with it. Corporate interests are protected by layers of law which are in their favour. The poor farmer mortgages land and loses it when unable to repay loans. Farmers are vulnerable, whereas it is hard to hold corporations accountable. A corporation can go bankrupt without the controlling individuals being affected unless there is a private guarantee involved.

Disclosure: Praveen Chakravarty was a founding trustee at IndiaSpend before he joined the Congress party as chairperson of its data analytics department.

(Paliath is an analyst with IndiaSpend.)

Courtesy: India Spend

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The Narendra Modi government’s much-hyped schemes — Ujjwala and Swachh Bharat Abhiyan — seem to have failed miserably in the prime minister’s own constituency, Varanasi. Majority of the women in Narottampur village, four kilometres from Banaras Hindu University, told NewsClick that they had not received any gas cylinder, nor had toilets been built under any scheme. A few of these women, who obtained gas cylinders, are finding it difficult to refill these owing to the high price.

Courtesy: News Click

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Over one crore persons have lost their jobs between January 2017 and October 2018, and an estimated 2.95 crore persons are actively looking for jobs now, according to latest CMIE estimates. These estimates are made on the basis of a monthly sample survey done by the CMIE. In the absence of any other source of jobs data – official or unofficial – these numbers have to be relied upon as indicator of the dire jobs situation in the country.

The results for October 2018 showed that the total number of employed persons in the country was 397.2 million compared with 407 million one year ago, in October 2017. If you compare the latest figures with those in January 2017, the number of employed persons has fallen by a chilling 11.2 million (1.12 crore).

In October 2018, the unemployment rate touched a high of 6.9%, even as the labour participation rate touched a low of 42.4%, the lowest in two years, since October 2016. Labour participation rate means the number of persons either working or willing to work. India’s labour participation rate is usually low because of the high degree of female non-participation.

One year ago, the number of jobless persons looking for jobs was 2.1 crore, which has since burgeoned to 2.95 crore – an addition of about 85 lakh more persons to the army of unemployed.

Meanwhile, the Narendra Modi-led BJP government has gone into a comatose state on this most important crisis. The whiz-kids employed by the Bharatiya Janata Party (BJP) high command and the government at top levels to churn out data that suits them seem to have exhausted their bag of tricks. For the last one year, they had conjured up ‘job creation’ data out of EPFO (Employees’ Provident Fund Organisation) and ESI (Employees State Insurance) enrolment figures, which were released expressly to create this illusion. However, after being universally criticised for this sleight of hand, it has now been officially admitted that these figures do not represent job creation but rather ‘formalisation’. This itself is a dodgy proposition, but that’s another story. The fact remains that EPFO and ESIC enrolment masquerading as job data has been given a burial, for now.

What the government has not done is to admit that job creation has been a failure primarily because of the bankrupt and foolish policies it has followed. In fact, it continues to rave about how well the economy is doing even when a phalanx of indicators point towards the exact opposite.

Imports are up, exports are down. The Index of Industrial Production (IIP) is stagnating. Capacity utilisation is down. Credit growth is stagnant or anaemic. Government spending is down. Investments have declined. GST (goods and services tax) collections are running short of targets.

Farm output is good but farm prices continue to agitate farmers since the government has refused to hike support prices as per the National Farmers’ Commission recommendations.

Even as the economy  continues to crawl, oil prices have increased and rupee has crashed vis-a-vis the dollar, sending import costs soaring. In response, the government is clueless and is desperately trying to cut down its own spending in a misguided effort to rein in the fiscal deficit.

This worry is a neo-liberal dogma that has never helped revive a flagging economy or create jobs or lift incomes. What the present efforts to cut spending by Rs 50,000 crore will do is to further deflate the economy and discourage private investment.

In other words, the cluelessness of Modi et al is an ominous portent that worse is still to come.

This article was first published on newsclick.in

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